" The public and private sector cannot simultaneously net save unless the Europeans engineer a competitive currency devaluation," writes Edward Harrison at Credit Writedowns. "Therefore, the Europeans' newfound fiscal austerity is at odds with the need of the private sector to reduce debt and will likely lead to a collapse in consumer demand and depression or a trade war. W
"Hyperinflation is the economic apocalypse many doomsdayers pose as the logical end to the world's experiment with fiat money," Credit Writedowns blog says. Does the same fate await the U.S. as market watchers such as Marc Faber says? Taking up the case of Zimbabwe and Weimar as starting points, Edward Harrison points out that "The claims of hyperinflation awaiting the US or
"The issue was and still is overconsumption i.e. levels of consumption supported only by increase in debt levels and not by future earnings," writes Edward Harrison, echoing Minyanville's Mr. Practical and Kevin Depew, among others. "This is the core of our problem – debt."
Our vote for Best Read of the Day goes to the Credit Writedowns blog and Edward Harrison's piece, "The Origin of the U.S. Dollar as Legal Tender and its Link to Depression." The but of the thing is this: "What should also be clear from this Great Depression and the one after 1929 is that booms which turn into extraordinary busts lead to populist outcomes and
"The term 'Zombie Bank' was popularized during the S&L crisis by Edward Kane to connote banks which continued to operate but only as a result of government largesse as they were effectively insolvent," writes Edward Harrison at Credit Writedowns. "But what happens when the economy... turns down or asset prices fall? That's when day turns to night and the zombie
"[T]he problem is a lack of demand for loans not a lack of supply. The Federal Reserve can print all the money it wants. But, if there is little demand for more indebtedness, it is not going to have the desired effect of permanently reflating the economy – although it can create bubbles," Ed Harrison writes on the blog, Credit Writedowns. Harrison goes on to make a cruc